He said that travel and financial sanctions on 126 military leaders and associates will be lifted, but the arms embargo will remain in place. He also cautioned that the sanctions could be reimposed at any time.

Earlier in his three-day trip Carr met with the opposition leader Aung San Suu Kyi at her home, which the Sydney Morning Herald explains was where Suu Kyi was held captive by the former military junta for two decades.

"I am in favor of suspended sanctions because that makes it quite clear that good behavior will be rewarded and if the good behavior is not maintained the rewards can also be taken away," she is quoted as saying after the meeting.

Australia had already removed 262 individuals from its sanctions list after the April elections, in which Suu Kyi and her National Democracy Party secured a landslide victory, the Director of the Burma Office in Sydney, Dr Myint Cho, wrote in a piece published by the Irrawaddy news magazine. He argues that like the US, the European Union and Canada, Australia has been calling for "the release of all political prisoners, the cessation of human rights abuses and the beginning of an inclusive dialog towards national reconciliation," however he cautions that Carr must be cautious of being over-optimistic about the situation on the ground.